Cloud Transformation: Making the Enterprise IT Agile

IT and business look at cloud adoption very differently. Technology teams in the organization look at the cloud as an opportunity to move from Capex to Opex, reduce data center footprint, bolster agility, modernize legacy applications, and deliver engaging new experiences for their customers. Business teams need to see the whole picture to drive investments that maximize value for the enterprise. However, most enterprises lack a unified view into their entire IT landscape. They also do not have all the skills, software and experience needed to maximize the returns from their cloud investments.

In this episode of Infosys Podcast, Infosys anchor Alex speaks with Pradeep Yadlapati, Associate Vice President and Head of Enterprise Cloud Ecosystem Practice at Infosys, about the state of cloud adoption in organizations. Pradeep explains how cloud transformation could enable enterprises to increase their business agility while improving the resilience of their IT landscape.

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Podcast transcript

Alex: Hello, folks! Welcome to Infosys Podcast. This is Alex speaking, your host. Today we have with us, Pradeep Yadlapati, as our guest. He is the associate vice president and head of the Enterprise Cloud Ecosystem Practice at Infosys. So, hello Pradeep and welcome to the show.

Pradeep: Thank you for having me, Alex. It’s a pleasure talking to you.

Alex: So, let’s begin with how the cloud has evolved over the last decade.

Pradeep: So, let’s look at what has happened in the technology industry over the last couple of years. We started seeing evolution of people starting using cloud. To start with, most of us are familiar with how a Gmail is used, which is hosted elsewhere, you don’t know where is it, but you get to access it and you can send your emails from wherever you are. So, in simplistic sense, that’s been the first example of a cloud where you could access from anywhere. From there to today, with all the digital disruption that is happening around, consumers expect information to be available at their fingertips – applications to be changing based on their feedback, transactions to be happening in split seconds, having omnichannel experience irrespective of where they are. And cloud has been a center of all these transformations that have been happening.

The initial adaptors, I would call as the initial trendsetters, had started leveraging this opportunity and started moving their applications onto cloud. Although the clear priorities at that point in time have been “how can I save more cost”, because running my own data centers would mean I have a capital expenditure, to reduce that a cloud provides me an opportunity to move into an Opex kind of a model, which primarily what it now means is ‘pay as you go’. So that’s the thing that was very exciting for the initial adopters and they started moving applications onto the cloud.

Today, the predicted business for cloud is to be about US$236 billion by 2020. It’s a huge market out there. Clearly, enterprises have started looking at it. All the examples that we have heard, the unicorns that we have been talking about – Uber, Airbnb, etc. – have all born on cloud companies where they don’t have any infrastructure, they don’t have any physical assets, but they run their applications on cloud, and that provides the scalability that you have today. Clearly, as we see, we expect about 83 percent of enterprise workload to be moving into cloud by 2020. So, there is a huge opportunity that cloud offers to everyone.

Alex: So, by 2020 applications on CDs will become obsolete and everything will be on the cloud?

Pradeep: Oh, yes, absolutely! Not just applications on the CDs. You will not see a lot of physical data centers that exist. Imagine you trying to hire a building at San Francisco. The cost is humungous! Instead, having that in a low cost location, where you don’t even know about it, and being able to access that from anywhere is a fantastic thing that you can do to yourself and your company, and it just saves so much cost.

Alex: So, you could have a workforce working from home?

Pradeep: Oh, you could potentially do that. Yes, absolutely. So, a part of that is your workplace transformation. How you can provide the millennials the access to information, collaborate faster, and all of that is part of cloud adoption as well.

Alex: What are the current trends in cloud?

Pradeep: Oh! A couple of things that we have started. To start with, moving their infrastructure onto cloud, what we call as a lift and shift, which essentially, although it sounds like physical movement, is actually moving your applications without having to change anything and move onto the cloud. Most cloud providers talk about this as a mass migration – lock, stock and barrel movement. The second one is about how can you re-architecture your applications that can be digital-ready wherein, like we talked about omnichannel experience, how can you bring that by re-architecting the applications. Second one is how do I make sure my legacy assets are digital-ready, and how can I bring the transformation across the applications, infrastructure, data, and platforms that I have within my enterprise. So, all of that invariably is part of the current trend. So in that sense cloud today is something that you cannot live without. Organizations have no choice, honestly, because it offers tremendous potential. The thinking now has to be when and how rather than why?

Alex: So does cloud allow more automation?

Pradeep: Automation is one part of it. What it allows is a couple of things: One is high availability of information as applications and data. Second is reliability. The third one is performance, which means that you no longer have to worry about whether it’s going to be up or down because most of the cloud hosted assets are promised higher availability of 99.95 percent, that’s significant.

Alex: If somebody is not fully aware of the full potential of cloud, what does Cloud First mean?

Pradeep: To start with, the Cloud first is a thinking. Cloud First is a strategy that enterprises would want to adopt. What it essentially means is you are bringing applications faster to consumer. How you achieve it is through different means. You design your applications that are ready for cloud, which essentially means that you no longer develop them on your on-premise technologies that you use but straightaway go to cloud where you don’t have to manage the infrastructure, you don’t have to manage the servers, you don’t have to manage the storage. You can seamlessly develop applications there. And that is the Cloud First strategy that enterprises are looking at. It provides quite a few advantages to the consumers. Essentially, it provides the ability to collaborate better through these applications, reduce your total cost of ownership, bring these seamless experiences across different channels, that is, mobile, online, in-store, etc. All of that can be enabled. So the designing of your applications to be hosted on, to be developed on cloud is your Cloud First strategy.

Alex: Sure, so everything is at your fingertips. Actually I wasn’t sure but Cloud First is a terminology basically that you are using. Is that what it is?

Pradeep: Yeah, it’s kind of a strategy that you adopt.

Alex: So tell me how are enterprises exploring the new cloud capabilities?

Pradeep: We talked about how the evolution of cloud has happened with the infrastructure-centric conversation. Today, we believe that at a point where we are in time, the cloud transformation is fundamental to the digital disruption that the enterprises are going through. In any enterprise there are different components that constitute the enterprise application landscape. These are called systems of record, systems of innovation, systems of engagement. The way we look at it systems of record are the age-old systems that you have in your enterprise with a lot of business logic in it, so much so that no one knows what is really in there. And it’s been maintained and developed over 30-40 years, however long that enterprise has been. In all these companies that we talked to today, one of the key challenges is how do I move that, how can I make them digital-ready, how can I make them part of my cloud transformation.

The second part is about what we call as systems of engagement – the mobile apps and everything else are ways to engage with your applications. So those systems of engagement are probably relatively easy, fall in the easy bucket of movement. The third one is about the systems of innovation which is all the analytics that you run behind the scenes, understanding your consumer patterns - what are they liking, what are they not liking, may be look at what Amazon does. That’s the analytics that is running behind the scenes for you. That is applicable pretty much in every business today - whether you are online or mobile, you keep getting these interesting recommendations. And all of that is part of your own business-centric logic that is running to enable cross-selling opportunities. And today while most of the enterprises have started looking at systems of engagement, which are easier to move to cloud, the transformation, we believe, has to start from looking at “How can I make my enterprise ready for the disruption that is happening, with the cloud as an enabler”. And that is what most of the CXOs are thinking about. Conversations today are more about how can cloud be an enabler for the CIO to achieve the business objects that are set by his business, and that’s the primary change that is happening.

The second thing is that the transformation itself is a long drawn process and that requires to not just bring in the technology change, but also changing the enterprise behavior. The enterprise change management as we call it is an important element in terms of “how do I educate my own IT community that the way the operations would run today would be different tomorrow when they are moved to cloud”, because no longer they have to monitor things on a regular basis. Cloud provides you those capabilities. How do I not develop on age-old technology, but leverage cloud and create applications that are mostly digital-ready? This is where most of the conversations are happening when we look at most of the enterprises that we deal with.

So it’s about running this large-scale transformation end-to-end. It’s not application centric, it is not infrastructure centric, it’s actually across the food chain. To enable that to happen, you need a kind of a sponsorship from the senior executives within the organization who can drive this. Like I said, change management is not going to happen easily without a clear sponsorship. And that’s where we see the changing paradigm shift in terms of who actually sponsors this transformation.

Alex: In terms of the enterprises, are you looking at the smaller enterprises?

Pradeep: So traditionally as an organization we are more focused on enterprise segment which is the G2K customers as we call, the Global 2000. But we do realize that it is important to collaborate where the innovation is happening. So we have a different model to work with the small and the medium - a more collaborative model. In the companies where we think there is innovation happening, we have done a few of those where we could do some initial capital investment to work with them collaboratively. We have built some solutions around that and then taken to our customers. So that is a different model that we adopt, but purely from a customer-focused standpoint we continue to be focused on the enterprise segment, which is the Global 2000 customers.

Alex: You have covered a lot of benefits. But are there any benefits that you can elaborate on?

Pradeep: One is we talked about the operations – the cloud operations as we call it. See today, the extent of managing the operations, which is from your on-premise environment to cloud environment, happens seamlessly at a low cost. You are no longer monitoring the number of servers up time and availability as you do in your own data centers, that’s managed seamlessly. The amount of consumption that is happening – you get a view of that, you have cost predictability, you exactly know where you are spending, who is consuming it, all of that. So, that’s a greater advantage that the business gets. Third one is the scalability element of it, which means that in a situation where you know you have a holiday sales happening and you need your applications to scale up to ‘n’ number of users, that can happen seamlessly today with cloud. Earlier that used to take at least a couple of months for you to plan ahead on time because you have to procure infrastructure to be able to launch your new products. That’s not the case today. It reduces the time to market tremendously.

We talked about moving from the capital expenditure to Opex. You are not buying anymore servers that you used to do earlier. The agility that it brings is tremendous. Business can pretty much conceptualize their new ideas and take to market in a very short timeframe, with obviously things like DevOps helping in that journey, but cloud being an enabler in that process. So all of that kind of enables an enterprise to be agile, provide the business growth, resilience that they are looking for, cost optimization, and provide seamless customer experience. All of that are the benefits that cloud provides.

Alex: As much as we have benefits, there are challenges. So what are the challenges organizations face in adopting cloud?

Pradeep: Cloud transformation is a journey. To embark on that journey, clearly there are things that an enterprise needs to understand. It’s going to come at a certain cost to start with because you will have to make some investments to make things easier for you as you move. And that requires a better business case articulation. Somebody picking that battle is an important thing. We talked about sponsorship that is an important element in any enterprise to be able to provide that kind of a support and bring the change management. So those are the elements that enterprises land themselves into whenever they embark on this. Being able to provide a constant view to the business in terms of how some of these investments would get realized over a period of time and what’s the cost benefit for that. So that’s something that they would have to articulate.

The second one is to provide the confidence and understand the boundaries and regulatory and compliance needs that the enterprise need. Bring in the required change management which almost means like how will the future of provisioning environments going to look like, who is going to play a role in that, provide visibility into their cost optimization, and almost set the real expectation that this is not going to happen overnight despite all the buzz that is out there. We are unique and it is going to take time for us. Understanding and setting that expectation because all of this requires a certain change. Everybody aspires to change fast, because that’s what they want to do, but understanding that there are situations where they can move things as is with a click of a button but there are also the cases where they are not ready themselves because of certain reasons - because of technology that they have used (sometimes they are outdated, they are no longer available), the applications need a little more attention (they need to be remediated for them to be ready) - so understanding that element of it.

The other element is reskilling their own employees, understanding that these new technologies mean learning for their employees. Bring that kind of a change because that requires a grass-root level change. Especially, if you want to move on a Cloud First strategy, it almost means that you’re going to change your workforce skill levels and constantly upgrade them to be ready for the future. So all of these are traditional challenges that enterprise face on their cloud journey.

Alex: One thing that I’m curious about is generally I think the public now has become accustomed to the cloud without even realizing it. They are actually finding themselves in applications that are not even on their systems, they are on the cloud. So for me it’s not so complicated an issue but does the workforce need a higher skillset to adopt cloud? Is there an immense amount of training or is this something which is so streamlined that it is actually quite accessible?

Pradeep: The skill availability is a challenge. Reskilling is a challenge that the industry is facing today. It’s an important thing that us a service provider and the customers have to address. It’s not a technology that’s been around for a long time. The change that is happening is rapid. Just to substantiate that - the AWS, one of the cloud providers, sends out thousand plus new services in a year. Imagine that! Someone trying to get up to speed on that is humanly impossible. And the same thing happens with Azure, Google, etc., which essentially means that you need to have a constant reskilling program in place so that you know what is really happening, how can I bring in the new innovation. Now, that requires you to understand which services to use. Imagine having thousands of things available out there. It is like going to a grocery store - you are trying to pick something, and you really need to know where you need to go to, which one you need to pick. That’s something that requires constant upskilling and it probably requires a bit of help from partners like us who could tell them “your focus should be in these specific areas”. That’s what we should be looking at.

So, yes, reskilling is going to be a constant change, developing applications is going to be very different. It no longer requires the same time and the same research that they used to do, but you need to know which one to pick and from where, and that’s not going to be easy unless you are being trained on those things. So that’s an important challenge that we are dealing with. There aren’t so many people available out there who know all of these. It’s a huge investment that we need to make, and it’s the investment that each individual needs to make to themselves to be relevant in the current world with the rapid changes that are happening around us.

Alex: We have discussed the challenges, but how does Infosys help businesses overcome these obstacles?

Pradeep: Enterprises today need a partner who can help and execute their cloud strategy, which is not just about transitioning or migrating their applications, what we call as the non-differentiating applications to cloud, but also leverage this tremendous opportunity that is out there to transform for their enterprises to be digital-ready. So Infosys plays a pivotal role in showing enterprises the whole picture and help them realize the whole potential of their cloud investments. The way we do that is taking an enterprise-centric view of what is relevant to that particular customer, bring the experiences from what their peers are doing within the industry, what is more what we call as the ‘cloud-ready applications’, what is their disposition, taking a business-centric view of looking at their entire value chain, and almost telling them which of them are suitable for cloud. The second thing is drawing that roadmap for them and looking at the kind of transformation that they need to go through, whether it is what we call as the mainframe modernization or legacy modernization or whether it requires a modernization across their application landscape, looking at bringing micro-services, APIs, etc. all of that is part of our transformation roadmap. Just to quote few examples, for one of the largest airline manufacturers, we have kind of digitized their operations so much so that they were able to leverage that and monetize it within their industry. Similarly, for a car manufacturer, deploying analytics, telematics, so that they can get a real-time information of the driver behavior and that data can be monetized from insurance purposes and other things through cloud as an enabler. And that’s the different approach that we take.

Alex: So a driverless car would rely on cloud as well to navigate itself?

Pradeep: Absolutely! There is a lot of information that is getting captured in real-time and there are a lot of decisions that are happening in real-time. To have that kind of a computing power, all of that requires real-time scalability and all of that invariably is possible on cloud.

Alex: Does there have to be an acceleration in technology, speed of accessing information, or is it working to an optimal level?

Pradeep: You bring a very fantastic point which is what we call as edge computing, which means not everything needs to go all the way, for as the servers are sitting somewhere else, actually there is a computing that is possible on the edges. And that’s the new investment that’s happening in terms of how can you bring analytics at the edges. And that’s the new technology, new trend that we should all be looking forward to and be excited about.

Alex: Well, that’s something that we are looking forward to in the future, but is there anything else that you foresee for the future of cloud?

Pradeep: Today we talked about how cloud is at the center of digital transformation that is happening. If you look at, a lot of buzz around AI, analytics, machine learning, etc. is available for us to explore. What we have to start seeing is real-time predictions in terms of how your environment is going to behave, how will you react to it? So, it’s pretty much the predictive analytics around it, bringing the machine learning elements into your operations, seamlessly spinning up, spinning down of environment without human interventions, understanding that there is a potential problem that can come up and address that proactively without having a human react to it.

These are tremendous opportunities that are out there that we can start seeing. The exploration of blockchain is another area where we will see cloud being utilized. We can look at some of the newer technology trends such as containerization, moving to more of a SaaS (software-as-a-service) based approach. Today, we are all talking about building applications, but there is also potentially a SaaS based approach to it where you don’t have to build anything, just buy the application that just does things for you. So that will be the future where there will be a lot more that will happen around SaaS adoption.

Enterprises will have to start looking at domain-centric solution that will help them. For example, can I have a merchandizing solution that can help me? Can I have a retailing solution? Can something manage my supply chain seamlessly? Instead of spending enormous energies in terms of re-architecting my applications, is there a way that I can do a plug and play? That reduces the time to the market, but at the same time the cost. That’s going to be some of the things that will evolve over a period of time. And the thing that we talked about edge computing is also something that is an exciting thing that will start showing some traction as we move.

Alex: I want to take you back to the ‘90s. In the ‘90s we had a mobile phone which had very few functions. The thought of people saying, ‘one day everything will become amalgamated in your phone - you will be able to watch, play, and watch films, and can create so many things, can even have documents’, which I know, now cloud enables documents to have in your phone. So that was an amalgamation on a simple device, which is a phone. Do you see IT amalgamating its different like, for instance, do you see AI amalgamating with cloud and seeing a greater kind of concentration in technology in future?

Pradeep: There is already a lot that is happening right now with AI on cloud. What the future holds is tremendous leverage of that to different use cases, which probably none of us are thinking about at this point in time but that provides a greater opportunity for all of us. Today, an interface like an Alexa or Google Home, is your window to what is happening out there through a voice-based interaction. That to an extent does few things - it can tell you your schedule, it can play a song for you, it can almost tell you what’s happening around you based on your interest. It can get so personalized that it can pretty much tell you what did you buy last year and what you should be thinking about, or it could even tell you which location you may be interested in, provide you recommendations in terms of what car you may like and what the cost of that could be. So the number of opportunities and use cases and interfaces that it provides is enormous.

Alex: So it’s actually making our choices simpler, in a sense.

Pradeep: It is taking away your thinking power and putting it into a machine.

Alex: It has been an incredible pleasure to sit and discuss this and actually learn so much from you. Thank you, Pradeep. And thank you all for listening. If you would like more information, please visit Infosys.com. We look forward to you tuning in the next time. Thank you!